South Caucasus: Regional Review

2016 was a year of many “twists and turns” for the South Caucasus countries. However, there were no revolutionary changes in the region and the status-quo that had been in place for several years largely held, unshattered even by the “four-day” war in Nagorny Karabakh in April. It would be fair to say that all three South Caucasus states managed, with more or less success, to cope with the problems and challenges they faced in 2016. The given article presents a brief overview of the last year’s major events and developments in South Caucasus.

The escalation in Nagorny Karabakh

The renewal of the old ethno-political conflict was the “hottest” event of the year. The resumption of fighting is believed to have been fuelled by a string of prior small-scale cross-border skirmishes in the Karabakh sector and other parts of the Armenian-Azerbaijani border, the lack of progress in peace negotiations and a shift in the military balance between Baku and Erevan. An especially eye-catching and noteworthy aspect is that both sides deployed a wide array of hardware during the April crisis.

On the one hand, the Azerbaijani army’s performance in April 2016 attested to the increased strength of the Azerbaijani state. Despite failing to defeat the armed forces of Armenia and Nagorny Karabakh, and achieving only minimal success in terms of recaptured territory, Baku scored a big psychological victory. Earlier, Nagorny Karabakh was widely viewed in Azerbaijan as an impregnable stronghold – this perception has somehow faded now. On the diplomatic front, Azerbaijan secured Ankara’s and Kiev’s support, while Russia, USA and Iran sought to maintain constructive relationship with Baku.

The Armenian army also fared well in the April war. It managed to recover from the initial shock and regroup fairly quickly. The Armenian and Nagorny Karabakh societies both demonstrated national unity in the issue of the self-proclaimed state. Nagorny Karabakh has also succeeded in protecting its vital infrastructure.

At the same time, the April escalation did not lead to any changes in the negotiations format. The OSCE Minsk Group continues to be the only conflict resolution mechanism, despite being commonly criticized for ineffectiveness. The main principle of the Minsk process, based on the eclectic mixture of the all-too-familiar concepts of territorial integrity and self-determination of nations, remains intact too. In another significant post-conflict development, Russia has noticeably intensified its mediatory efforts in the peace process beyond the Minsk format. The ceasefire agreement was signed right in the Russian capital, and the Kremlin then put additional pressure on Erevan and Baku to force them to the negotiations table. The West seems to have accepted Russia’s special role in the conflict resolution process, mainly because Moscow obviously has no intention of changing the status-quo or revising the status of Nagorny Karabakh. Besides, the Russian leader Vladimir Putin exerts enormous informal influence on the Armenian and Azerbaijani presidents, Serzh Sargsyan and Ilham Aliyev. By maintaining the balance between Armenia and Azerbaijan, Russia made it clear that it wants the status-quo to remain, and the West is not going to stand in its way.

“Forgotten” conflicts

Abkhazia and the so-called South Ossetia stayed out of the spotlight, to some extent, last year, having joined the ranks of “forgotten conflicts”. The Georgian factor is increasingly “marginalized” in both self-proclaimed republics. Russia’s opinion, rather than Tbilisi’s view, remains the main factor to determine relations between the “government” and the “opposition” both in Sukhumi and Tskhinvali. From Moscow’s perspective, Abkhazia and South Ossetia are a new reality in South Caucasus (as stated in the foreign policy concept of the Russian Federation), and the Russian foreign ministry and other governmental agencies have to defend and promote this narrative. It does not mean, however, that Georgia is prepared to recognize the current situation de jure. The West continues to stand by Georgia, its main ally in the South Caucasus, in the conflict-resolution process, but seems reluctant to take any steps to change the status quo.

The internal situation in the breakaway regions was marked by significant political and social processes in 2016. Opposition protests continued almost non stop throughout the year in Sukhumi, with opposition parties seeking to keep pressure on the government. The idea of a referendum to join Russia resurfaced in South Ossetia in 2016, inflaming a heated public debate. At the end of the year the de facto president of Abkhazia Raul Hajimba and the Abkhazian opposition finally reached an agreement to co-opt opposition representatives into government positions (prosecutor general, vice premier and some other high-level posts). But sustainability and viability of the deal, as well as the future political landscape of Abkhazia, will depend on the outcome of parliamentary elections 2017.

A compromise decision was made in South Ossetia to postpone the referendum to join Russia until after the presidential elections. The presidential campaign began in South Ossetia in December 2016 with the vote due in April. The presidential race is widely expected to become a political showdown between two main contenders, the de facto president Leonid Tibilov and the speaker of the de facto parliament and the chairman of the United Ossetia party Anatoly Bibilov. The presence of Eduard Kokoyty in the presidential candidates list adds intrigue to the story.

Georgia: the year of parliamentary elections

In Georgia, the ruling party pulled off a decisive victory in the parliamentary elections 2016, having accomplished all key objectives it sought to achieve. After four years in power the Georgian Dream was able to retain its leadership. Despite the defection of several prominent members, the coalition-turned-party Georgian Dream emerged from the elections stronger and more united. Led by the prime minister George Kvirikashvili, the party won 115 parliamentary mandates, two seats more than required for the constitutional majority. The party’s representatives praised the vote as exemplary and a crucial milestone in the country’s democratic development. The leading opposition party, United National Movement, got only 27 mandates. After the elections the party was hit by internal rifts and tensions and eventually split into two camps. One consists of Michael Saakashvili’s staunch supporters who remain loyal to the ex-president, while the other has called for the party leader to be replaced by another politician from among those residing in Georgia.

The 2016 elections have upset the two-party political landscape of Georgia. The centre-right Alliance of the Patriots of Georgia, which positions itself as a “champion of traditional values” and is known for fierce anti-Turkish rhetoric and frequent public statements about the “Islamic danger”, won 6 parliamentary seats.

Political temperature heated up in Armenia in the wake of the April escalation in Nagorny Karabakh. The renewed conflict has exacerbated the country’s endemic problems stemming from economic hardship and widespread public discontent with the government’s policies. Armenian-Russian relations also suffered a certain setback as a result of the war, as Erevan was frustrated by Moscow’s role in the April crisis and by the increasing Russia-Azerbaijan cooperation.

The political tensions culminated in the dramatic events in July when a paramilitary group Sasna Tsrer stormed and occupied a police station in Erevan. Although the two-week standoff ended in Sasna Tsrer’s surrender to the authorities, the outpouring of solidarity and sympathy towards them from the ordinary public reflected the low level of Serzh Sargsyan government’s political legitimacy. In an attempt to quell the tensions, the prime minister Ovik Abramian was replaced in September 2016 by Karen Karapetian, who has a reputation as an apolitical “technocrat”. It is the new premier who will likely be in charge of Armenia’s transition from presidential to parliamentary system. Parliamentary elections are scheduled in Armenia for April 2, 2017. Their results will shape the future political landscape of the country.

In late September residents of Azerbaijan voted in a referendum on whether to accept a package of constitutional amendments put forward by the government. Among the 29 proposed amendments, the following two are considered as most significant: one to extend the presidential term from five to seven years and the other to give the president the discretionary power to dissolve parliament. The former was backed by 84.2% of those who voted in the referendum, while the latter by 87.9%.

According to experts, the referendum was mostly prompted by economic problems. The sudden collapse of oil prices caused a shortfall in budgetary revenues and led to the depreciation of the national currency, manat. In the last decade Azerbaijan has developed a viable stock market, which was used by the government as a tool to buy citizens loyalty by means of generous payouts. However, the system has become less accessible recently and, together with the pressure on manat, set off structural economic problems in the country. In the absence of public policy – and due to economic woes – much of the competition takes place within the bureaucratic elite. Under such circumstances, the referendum and the constitutional reform can be seen as a loyalty test on the one hand, and an instrument to unite different groups of influence on the other. At the same time, the referendum was a test for the opposition too. Although the government’s positions still look quite strong, it is clear that the authorities are struggling both to conceal the economic crisis and stop the spread of radical Islam among the Azeri youth.

Conclusions

External factors had a significant impact on the region in 2016. The first to mention are Brexit and its implications for the future of EC, Donald Trump’s stunning victory in the US presidential elections, and Syrian crisis – all of them were watched with great attention and interest in all three South Caucasus nations. But developments in neighboring countries aroused even more anxiety: an attempted coup in Turkey and subsequent purges of the country’s political elite, the lifting of decades-long sanctions from Iran, the escalation of the Russian-Turkish tensions caused Turkey’s downing of a Russian jet and a thaw between these two biggest regional players some time later. Relations with Putin’s Russia remain a priority for all three countries, though their policies towards Moscow differ.

On the whole, 2016 was a more peaceful year for the region than for the rest of the world. The anxieties and struggles of the early years of independence – initial nationalistic euphoria, problems of statehood and other challenges – are history now. Although crises will continue to affect the three countries, they have already learnt how to handle them. Their sustainability and viability as sovereign states is no longer in question, and their institutions are gradually gaining strength. 2017 is likely to bring new serious challenges, whether domestic troubles or effects of global political shocks, they will have to cope with.